MLB's salary cap proposal won't fix the league's non-existent competitive balance problems
After years of decline, Major League Baseball is finally growing in popularity again. Particularly with young fans, drawn to the game with faster pace of play, and a group of compelling, historic stars like Shohei Ohtani, Bobby Witt Jr., and Aaron Judge.
Ratings are up across the sport. Attendance league-wide has consistently increased, with some teams seeing significant growth already in 2026. All this momentum, however, could be squandered after the 2026 season. How? By an extended lockout.
Negotiations between the league's owners and the MLB Players Association have already started, and predictably, they're already contentious. Players, sensitive to the gap in revenue between big market and small market teams, have proposed increased revenue sharing that would be distributed from richer teams to less successful ones.
Any team that does not reach $150 million in player payroll would be penalized. Local television revenue would be more aggressively redistributed, while a higher percentage of income from home stadiums would remain with the teams. Essentially, the more you win, the more fans buy tickets, the more money you get to keep.
Owners, of course, balked. Their counterproposal set out a $245.3 million salary cap, and a $171.2 million payroll floor. Sounds great, right? The floor is higher than the players' proposed penalty level, and the cap would impact just six teams this year. Fans, especially those of small-market teams, were thrilled. Redistribute television revenues and compress spending. Surely, that will allow teams that spend less money to compete, right?
"Our salary cap and floor proposal levels the playing field while sharing baseball revenue with the players 50/50 as we grow the game together," said MLB spokesman Glen Caplin in a statement. "Further, by sharing media revenue equally as part of our proposal, we can address another top fan concern of local TV blackouts."
Turns out though, that ownership's proposal includes all sorts of ancillary benefits in their "cap," as well as pre-arbitration bonus pools. As MLBPA chief Bruce Meyer explained this week, owners would take "billions of dollars" out of the 50/50 revenue split first, and player salaries would be significantly depressed under this arrangement.
"It's not even a real 50%. It’s taking billions of dollars off the top before they’re proposing to even share any of that," Meyer said. "Players' share under their proposal would go down. Players' share for this season, 2026, is projected to be well over 50%...Had MLB’s proposal been in place in 2026, players would, we estimate — would lose over half a billion dollars."
This is the problem with salary caps, and fans rushing to take the side of ownership, assuming that a cap would "fix" the sport. Owners do not care about competitive balance. Many are using baseball teams as real estate developments, then do not count that ancillary income towards baseball spending. The Atlanta Braves, for example, own The Battery, a shopping and dining development right next to Truist Park. They own it, they bring in the revenue, and then don't count it towards their baseball team's bottom line.
Those developments don't exist without the baseball team there to draw millions of fans, but the revenue would be excluded from the 50/50 split, going entirely to ownership, just because it's outside the stadium gates. That $245 million cap and $171 million floor includes over $23 million in player benefits. And amateur bonus pools that add up to roughly $20 million per team.
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So team payroll caps would actually run around $205 million, and the floor would drop to $128 million. It's a way for owners to limit spending, not to actually compress an imaginary competitive gap. As Meyer explained, the league's current system allows any team to spend whatever they want. When they choose not to, cheap owners and some fans then point to the salary disparity as "proof" of competitive balance issues. Even though that salary disparity is entirely up to them.
"Every team now has the ability to put a competitive team on the field, every single team," he said. "One of the things that I find kind of ironic in a perverse way, if team X decides we’re not going to spend money on players, well that increases the disparity in payroll."
The Miami Marlins are spending $74 million on player payroll this year. The argument from fans and owners is that the Marlins would spend more under a cap system, because of increased revenue sharing. Except the Marlins already receive an estimated $70-75 million in revenue sharing. If a player-led proposal gives them even more money from the Dodgers or Yankees, why could they not just spend up to $125 million on salaries anyway?
Obviously, Marlins ownership doesn't care about winning a few extra games per year. They're not investing in a long-term fan base by showing a commitment to putting a quality product out on the field. They're investing in developing "Miami Live!" That's the new dining and entertainment district going up next door.
Or, as a 2025 press release described it, "...a transformational entertainment development at LoanDepot Park to further enhance the best-in-class ballpark experience. The development will include indoor-outdoor dining and entertainment spaces aimed at fostering community and elevating the fan experience..."
That's the real goal. A way for the Marlins to act as a component of real estate investment based on an "entertainment district." Or, more commonly, a mall. All that Miami Live revenue would go to team ownership, without any requirement it be used to improve the roster. Even though that mall wouldn't exist without the million people per year who somehow pay to watch the Marlins play.
We also have proof that the more teams win, the more attendance grows. The Blue Jays made the World Series in 2025, coming up one cleat short of a title. Their per game attendance thus far is up 12,366 fans per game. Seattle is up over 6,500 fans per game after reaching Game 7 of the ALCS. Milwaukee has added over 3,200 fans per game. Win more, make more. It's that simple.
All of this is to address a nonexistent competitive balance gap that ignores actual reality and historical data. The Los Angeles Dodgers and New York Mets have spent nearly identical sums of money over the last five seasons, including 2026. $1.752 billion compared to $1.751 billion. Yet the Dodgers have outperformed New York by 67 wins over that time frame. LA's collective winning percentage is .622, compared to the Mets .527. The problem isn't money, it's smart use of it.
The Angels play in the second-largest media market, have spent over a billion dollars on player payroll the last five years, and are collectively around 100 games under .500 in that time frame. Milwaukee had the best record in baseball last year, despite one of the lowest cumulative salaries. The Guardians are routinely one of baseball's cheapest teams, yet they've won three of the last four division titles and are well on their way to a fourth in five years. Yes, the Dodgers have won the World Series in 2024 and 2025, but it was just two years ago that they were derisively referred to as "chokers" because the randomness of baseball's postseason tournament made it so they hadn't won consistently.
The lesson fans have taken from this is that owners should be allowed to spend less money on players in order to close a nonexistent competitive balance gap that won't be fixed anyway. If the cap is $200 million or $250 million, the Dodgers will be at the limit. If the floor is $100 million or $128 million, the Guardians, Marlins, and Pirates will be at the bottom. The best players will gravitate to LA, where they can have a better chance of consistent success and off-field marketing income. The Pirates will still cry poor after reports that they were the most profitable organization in MLB.
Fans should support winning and trying to win, not enhancing franchise valuations. That's what owners are counting on.